U.S. homeowners are getting better about keeping up with their mortgage payments, driving the percentage of borrowers who have fallen behind to a three-year low, according to a new report.

Still, the rate of decline remains slow, credit reporting agency TransUnion said Wednesday. The percentage of mortgages going unpaid is unlikely to return anytime soon to where it was before the housing market crashed.

Some 5.49% of the nation’s mortgage holders were behind on their payments by 60 days or more in the April-to-June period, the agency said. That’s the lowest level since the first quarter of 2009.

The second-quarter delinquency rate is down from 5.82% in the same period last year, and below the 5.78% rate for the first three months of 2012.

The positive second-quarter trend coincided with an improving outlook for the U.S. housing market.

A measure of national home prices rose 2.2% from April to May, the second increase after seven months of flat or declining readings. Sales of new homes fell in June after reaching a two-year high in May. Sales of previously occupied homes also declined in June, but were higher than a year earlier.

Home refinancing surged in the second quarter, as interest rates sank to historic lows. And more borrowers with underwater mortgages—or home loans that exceed the value of the home—refinanced through the government’s Home Affordable Refinance Program than ever before.

“More people are making their payments, and that’s great,” said Tim Martin, group vice president of U.S. housing for TransUnion. “I expected a little bit better, but maybe we’ll see some more of that pick up in [the third quarter].”

Even as housing trends turned positive earlier this year, the U.S. economy began to show signs of faltering. The national unemployment rate remained stuck at 8.2%, and the pace of job growth slowed sharply, with employers adding an average of only 75,000 jobs in the April-June quarter. Hiring appeared to pick up in July, however, with employers adding 163,000 jobs.

TransUnion anticipates the mortgage delinquency rate will continue to decline. But it doesn’t see it falling below 5% this year.

The national delinquency rate remains well above its historical range, an indication many homeowners are still struggling five years after the housing downturn.

Before the housing bust, mortgage delinquencies were running at less than 2% nationally. It took about three years after the housing market crashed for the delinquency rate on mortgages to climb to a peak of nearly 7% in the fourth quarter of 2009. The rate has been trending down since then.

Home prices need to recover further for the delinquency rate to decline.

At the state level, Florida led the nation with the highest mortgage delinquency rate of any state at 13.48%, down from 13.91% a year earlier. It was followed by Nevada at 10.85%; New Jersey at 8.15%; and, Maryland at 6.79%.

The states with the lowest delinquency rate were North Dakota at 1.32%; South Dakota at 1.94%; Nebraska at 2.24%; and, Wyoming at 2.41%.

Foreclosure hotbeds Arizona and California each saw marked improvement during the second quarter.

California’s mortgage delinquency rate fell nearly 22% to 6.13%from a year earlier, while Arizona’s declined 21% to 6.14%.

One reason for the sharp declines in mortgage delinquency rates in those states is that homes tend to move faster through the foreclosure process than in Florida, New York and other states where the courts play a role in the process. That leads to logjams of cases involving home loans that may have gone unpaid for two years or more.

“You have states that are taking a long time to work through the delinquencies that they have, which is keeping their numbers up,” Mr. Martin said.

TransUnion’s research is culled from its database of 27 million anonymous consumer records.

Finding that perfect piece of Manhattan real estate is no small feat.

When my husband and I relocated from Atlanta a few years ago, we thought the rental process was challenging. At that time, we had no idea what buying an apartment involved. We’d owned real estate before — how much different could it be? 

We realized via our first agent (and there would be three), that the real estate rules in Manhattan are nothing like those in other cities. 

By the time we got to the third agent and had viewed apartment number 75, we knew we were better off working alone. I was far too picky, and no agent in his or her right mind was patient enough to put up with me.

However, if you are not obsessive, demanding, and unreasonable (like me), I do recommend working with an agent.

We did our homework every weekend, visited one open house after another, and we learned the ins and outs quickly.

More than 150 apartments later, we considered ourselves well-educated potential buyers. And finally, after about a year, we succumbed to the inevitable–paying around $700k for an 825-square-foot one-bedroom co-op in a full-service pre-war building on the Upper West Side that we absolutely love.

We have a large mortgage and a low-ish monthly maintenance that started at $800 and is now over $1,100. (Note, we spent our life savings on the downpayment and paid off all of our debt during our year-long search so that we’d be eligible for a mortgage.)

During this time-consuming process, my husband and I learned enough to write a book about NYC real estate, but for now, I’ll stick to a post.

Here are some of my personal tips to help you find THE ONE.

1. Buy where you want to live, not where you work. Don’t base your neighborhood choices on the location of your job. Jobs in New York can change as frequently as the weather. I’m glad that I listened to my gut and didn’t search only in areas convenient to my job in Midtown East. I broke up with the job, but my one-bedroom is still in my life. 

2. Make a short list of favorites and return to the apartments again and again. Visit during the day, at night, mid-week and on the weekend. Pay attention to bright lights glaring into the unit from other buildings, as well as strange noises, odors, or people coming and going. You’ll be buying those annoyances too.

Purchase the apartment that you’ve seen a minimum of three times and you love more each time. 

3. Consider walk-ups, but be realistic. Walkup apartments may have a lower sales price, but they may not suit your lifestyle.

Traipsing up and down several hundred steps per day to reach a high-floor walkup builds calf muscles but isn’t an option if you have an elderly parent or grandparent who visits.

It also isn’t advised if you’re forgetful. Leave your cell phone behind? Be prepared to climb the 99 steps again, be out of breath and late for the office.

4. Just because a celebrity lived there, doesn’t mean you’ll want to. We looked at an East Village tenement that was once the home of Beat generation icon Allen Ginsberg. We nearly walked past the building because it looked condemned.

Afraid of what we’d find inside, we ventured up the crumbling stairs to the ground floor and walked in to what appeared to be a scene from “Taxi Driver.”

We trudged to the fifth floor of the nasty co-op, taking note of each detail like any other apartment we’d visited. None of the doors matched. Some were wood; some were metal. Each one had the apartment numbers scribbled, painted, or engraved—-but definitely not in gold.

The real estate agent assured us the renovation hadn’t been completed. Really? 

Out of breath, we reached the top floor only to find a maze of dirty, cluttered rooms, one leading into the other, with an illogical floor plan. We walked through, looked at each other, and left. That one didn’t make it to the short list.

5. Always inspect the basement of the building. Request to walk through the basement if you are considering  an apartment. If you notice rat droppings, clutter in dark corners, smell trash or some other funk—RUN—don’t walk. If the basement’s not clean, neither is the rest of the building.

6. Talk to everyone. Talk to the doorman, the super, the residents, and anyone else you can find who would know any inside dirt. You’ll get a feel for the attitude, energy, and unmentioned quirks or rules of the building. One of the neighbors in our building had said Julio (our super) keeps the place spotless and that we’d be able to “eat off the floors.” And it’s completely true.

Keep in mind that Melrose Place Manhattan exists —-you want to avoid it for yourself and for resale. An odd (and now deceased) next door neighbor in our rental building was certainly a nuisance, but in a co-op, he could have affected our resale.

7. Buy the sponsor unit if possible. If you’re considering buying a co-op, the interview is the most stressful step. Buying a sponsor unit allows you to avoid the co-op board. If you even have to meet with the sponsor (usually you just deal with their brokers), it’s easier to meet with one crazy person than meeting with an entire board of them.

In our case, the biggest issue vis-a-vis the 80-year-old sponsor was not our three pets, it was the fact that I wasn’t Jewish. But after an hour-long flirtatious conversation and a few smiles and winks, my shiksa status didn’t seem to matter.

Another bonus of buying the sponsor unit: Some of the normal rules don’t apply, so we’re one of only several residents who have a washer-dryer in their apartment.

A downside of sponsor units is that as longtime rental units they tend to be in need of renovation or have undergone a quick/cheapie renovation that lasts about as long as a band-aid.  In our case we got lucky, since the kitchen had been renovated and the bathroom was semi-renovated. We just had to make a few construction and cosmetic edits.

8. Be reasonable, tenacious and don’t settle. Be practical with your wish list. You won’t find a sprawling two-bedroom with a doorman for $400K in Manhattan. 

But no matter how frustrated you get with the search, don’t settle for a property that you know you’ll like less after six months. Buying is (at least semi-)permanent. You’ll have buyers’ remorse and regret it later. If you’re not sure, rent a little longer, revise that wish list, and continue your search with a fresh approach.

9. Buy location. You can renovate the apartment or make improvements, but you can’t change the location. I recommend purchasing close to public transit, and in a convenient neighborhood.

Schlepping fifteen minutes to the subway or grocery store may seem fine in April and May, but on the most humid days in August or the chilliest days in February, you’ll hate it. There’s nothing worse than arriving for work schvitzed through your blouse, or frostbitten and unable to type. 

10. Take a weekend off. Get your nails done; go to dinner, a movie, or both. Forget about finding an apartment for 48 hours–the search may seem narrower and options may be more obvious. You’ll have a clear head once the New York real estate fog has been lifted. You could be just one step away from finding the almost perfect apartment.

The Woolworth Building’s neo-Gothic tower, one of New York City’s most recognizable landmarks, is about to be turned into luxury condominiums, a transformation that would be second only to placing penthouses atop the Chrysler Building or the Empire State Building.

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In a $68 million deal, the upper stories of the Woolworth Building, gutted years ago, will be converted into luxury apartments.

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Richard Perry/The New York Times

The view from the 49th floor terrace of the Woolworth Building.

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Richard Perry/The New York Times

The penthouses to be installed will be among New York’s highest.

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The world’s tallest building when it opened in 1913, the Woolworth Building was called the “Cathedral of Commerce,” its copper-domed tower soaring 792 feet into the skyline. Now, in a $68 million deal made final last week, the tower will be turned into about 40 luxury apartments, including a five-level penthouse in the cupola.

In a condo market still recovering from the Lehman Brothers crash in 2008, some developers have focused on conversions as a way to create new luxury apartments that cater to an eager, astronomically wealthy clientele who in the past few months have spent tens of millions of dollars on sumptuous apartments. With its historic status downtown, the Woolworth Building has the cachet to give it an edge over its competitors.

An investment group led by Alchemy Properties, a New York developer, bought the top 30 floors of the landmark on July 31 from the Witkoff Group and Cammeby’s International, which will continue to own the lower 28 floors and lease them as office space. “It’s very exciting for us,” said Kenneth S. Horn, president of Alchemy Properties. “We’ve done a lot of historic buildings in the city, but this is ‘the mama,’ as they say.”

The agreement promises to reinvent the tower that telescopes up at 233 Broadway, between Park Place and Barclay Street, as one of Manhattan’s most sought-after addresses, adding yet another chapter to the history of this Cass Gilbert-designed monument to Frank W. Woolworth and his five-and-dime empire.

Apartments will begin at 350 feet above ground level, offering panoramic views of Lower and Midtown Manhattan, Brooklyn and New Jersey. The condos, with ceiling heights of 11 to 14 feet, are expected to be completed by 2015.

Penthouses will be among the highest-altitude residences in the city, soaring above 700 feet.

An abandoned 55-foot-long basement swimming pool, originally part of a health club, will be restored as an amenity for residents. A new entrance on Park Place will serve residents with an elevator bank separate from that used by the office tenants on the lower floors.

“Not many people in the world would get to say they live in the Woolworth Building — one of the city’s most recognizable buildings,” said Andrew Gerringer, an executive for the Marketing Directors, a New York development, leasing and marketing company. “I think they’re coming on the market at the right time to do this.”

The trick to a successful conversion, he said, will be designing the large apartments the downtown luxury market prefers, despite the constraints imposed by the building’s infrastructure.

The project will cost approximately $150 million, including its $68 million purchase price, a spokesman for Alchemy Properties said. Although apartment prices have not been set, they may sell for as much as $3,000 a square foot, said Howard Lorber, chairman of the brokerage firm Prudential Douglas Elliman. That could mean $7.5 million for a 2,500-square-foot unit. The penthouse at the pinnacle could command more.

By comparison, the average price per square foot of apartments sold in the second quarter of 2012 in the Woolworth Building’s ZIP code — 10007 — was $1,250, according to data from Miller Samuel, a real estate appraisal and consulting firm.

Mr. Gerringer described $2,000 a square foot as “the new normal for iconic buildings,” noting that the Woolworth tower apartments will begin on higher floors than most traditional prewar buildings.

“You’re already raising the bar to begin with,” he said.

In 1998, the Witkoff Group and Cammeby’s International formed a partnership to buy the Woolworth Building for $126.5 million. They at one point considered remaking the tower as office space with country-club exclusivity. As part of that plan, the top 25 floors, ranging from 3,500 to 8,000 square feet, were gutted. They have been vacant for several years.

There has been much speculation over the years about potential buyers, including Italian businessmen and an Israeli investor group. In the end, four serious buyers looked at the property, according to people with knowledge of the deal who spoke on the condition of anonymity.

The deal has been kept quiet since negotiations began in April. But after it was finished, Mr. Horn, of Alchemy Properties, said, “I walked out of the signing and said, ‘Did this really happen?’ ”

Nothing Alchemy has done quite compares with the challenge of transforming a signature piece of Manhattan real estate into residences, but the physical size of the project, at roughly 100,000 square feet, is similar to other developments the group has handled.

“It’s our sweet spot,” Mr. Horn said.

Alchemy has developed 30 properties in the New York metropolitan area, and most of its residential projects have been boutique buildings with just a few dozen apartments.

Even owners of newer skyscrapers that tower over the Woolworth Building seem in awe of it. Bruce Ratner, chairman of Forest City Ratner Companies, which developed the 870-foot, Frank Gehry-designed residential rental at 8 Spruce Street — currently the city’s tallest residential building — marveled at the view of its shorter neighbor from a penthouse window at the Gehry building recently.

“The Woolworth Building is what is really extraordinary,” Mr. Ratner said. “What I always say to Frank is that this building dances with that building.”

So hot is Brooklyn’s real estate market that Manhattan Borough President Scott Stringer came all the way from across the East River to headline the program at the Brooklyn Historical Society’s quarterly real estate luncheon today. “I came to Brooklyn on behalf of the outer boroughs,” he quipped in his introductory remarks.

However, the draw for many real estate professionals wasn’t Stringer, but David Bistricer. The developer recently purchased the former Bossert Hotel and has been busy transforming it back to a hotel. It had served as a community facility for the Jehovah’s Witnesses since the 1980s.

Bistricer said he’s brought on Jeff Klein and Atif Youssef, both affiliated with the Chetrit-backed King & Grove Hotel brand, to oversee the conversion of the former Jehovah’s Witnesses property, at 98 Montague Street, into a 300-room boutique hotel; he said it that the 103-year-old property would not be flagged by any major hotel chain and would continue to be named after its original developer, lumber magnate Louis Bossert. Bistricer estimated that the hotel would open in about a year, with little alteration to the interior spaces, which were meticulously maintained by the Witnesses. Instead, he said, the work would be limited to upgrading the electrical and plumbing systems. The plans are awaiting approval from the city’s Board for Standards and Appeals, he said.

Bistricer noted the average room size would be between 225 and 300 square feet, and the charge would be about $300 per night. He is also working to open a private rooftop lounge in addition to a lobby restaurant and bar.

Finally, he said, four residents will remain from the building’s former use as a community facility, but he indicated that they have been cooperative — in part because the construction work has not been overly intrusive.

What the developer wouldn’t reveal, despite pointed questions, was what he paid for the building. The purchase price is rumored to be about $90 million but has yet to appear in city records.

Bistricer was the second speaker at the event, following Stringer. The Manhattan borough president spoke at length about the role of community boards in development; the boards, he said, should be headed and filled by people with land-use knowledge. He worked to achieve that goal, he said, by appointing board members based on merit and not level of support for his election campaign. The results of this shift were on display in the New York University and Columbia University expansion approvals processes, which he said demonstrated how the give-and-take could work. On the other hand, he said his vote against Jamestown Properties’ Chelsea Market expansion was an example of him pushing back against a developer who appeared unwilling to consider community concerns.

“I hope [the Chelsea Market expansion] gets to a place where I can support it, but you have to use your advisory vote in a strategic way,” he said. “You say ‘no’ to send a signal to the developer to listen to the community.”

Also at the event, developer Alex Barrett, who has developed several Carroll Gardens brownstone projects, including 25 Carroll Street, said the demand for brownstone properties in Brooklyn, especially from end users, has pushed prices past the point where he can profit from renovating them. As a result, he said, he’s unexpectedly been forced to develop in Manhattan.

Finally, Brooklyn Bridge Park president Regina Myer discussed the ongoing development of that park. She updated the audience on the progress of various piers and indicated that the Starwood Capital and Toll Brothers development there would allow the park to be maintained without taxpayer funds

Residential property sales in Brooklyn jumped 50% in the first six months of the year from year earlier levels, hitting $1.2 billion, according to a report by TerraCRG, which also includes development sites and some industrial buildings. Slightly more than half of the total volume came in sales of multifamily residential properties. There, 233 buildings sold for a total of $635 million.

But it was the 91 sales of development properties that paced the overall gains in the period. They hit $188 million, nearly triple the year-earlier levels.

The action was heaviest in the neighborhoods of downtown Brooklyn/Park Slope and in Williamsburg/Greenpoint, as properties that had languished during the recession found new owners.

“We’ve seen both private and institutional equity pouring into Brooklyn,” said Ofer Cohen, founder and president at TerraCRG, who led the study. “Investors see Brooklyn as one of those markets that still have a lot more growth ahead of it.”

The upshot of the investment, Mr. Cohen said, is that the supply of “shovel-ready” projects has dwindled markedly. Down the road, that could have a big impact on prices.

“It’s going to take some time until inventory of new development sites comes to market,” he said.

In other parts of Brooklyn, the deals were smaller but there were more of them. In Bedford-Stuyvesant/Crown Heights and in greater Flatbush, the dollar volume of sales of multi-family houses is nonetheless on track to beat their last year’s totals. Mr. Cohen credited new investors looking to get into the market by buying up more affordable properties with driving sales volume in these neighborhoods.

The largest Brooklyn sale this year was the mixed-use property at 237-241 Bedford Ave. in Williamsburg. It sold for $66 million.

The global property market is edging towards recovery, according to Jones Lang LaSalle.

JLL’s latest report showed that after a dip in activity in the first quarter of 2012, investment volumes climbed back up to $108 billion in the second quarter – placing capital markets back on track to achieve a volume of approximately $400 billion by the end of the year.

Global economic outlook weakened as euro strains re-emerged, while low growth in developed economies remains a drag on a strong real estate recovery. Corporate occupiers adopted a wait and see approach to expansion, with sale and leaseback activity increasing as corporate looked to release capital.

Leasing activity improved from the first quarter dip, but remains lower than 2011 due to weak jobs growth. As a result, gross leasing volumes across 2012 are expected to be 10 per cent below 2011.

Global office vacancy rates are now 13.3 per cent, the lowest since 2009, while vacancy continues to edge downwards.

The weight of capital continues to compress prime yields in some markets, while as the yield gap widens, more investors are expected to look at secondary markets. Nonetheless, debt will be a constraint, especially in Europe.

In retail sectors, JLL highlights a low development pipeline in both Europe and the US, but retail sales underpin activity in Asia as industrial recovery builds in the US market. Hotels saw a shortfall in investment during the first half of the year, but a strong deals pipeline is predicted to make up for the investment levels in the coming months.

Both sentiment and levels of activity across the world’s major real estate markets have seesawed during the first half of the year. Following a slow start to 2012, the second quarter saw a modest rebound in investment and leasing turnover. But, economic uncertainty continues to affect investor sentiment. Deals are taking longer to close and the market remains polarised as investors steer clear of risky assets, focusing instead on prime product in core markets like London, Paris and New York. Yet, in spite of economic uncertainties, real estate as an asset class continues to attract a substantial weight of capital and remains firmly on track for this year’s global investment volumes to match the robust levels of 2011.

In the corporate occupier markets, leasing volumes are also up on the subdued levels of the first quarter, but activity is still running 10%-15% lower than in 2011. Expansion demand is relatively weak as corporate occupiers look for further cost savings and smart growth ‘in situ’. Where there is new demand it is typically focused on higher-potential ‘emerging’ markets like Mexico City and Jakarta, which are showing healthy levels of corporate activity, or on speciality markets such as the tech-rich areas of San Francisco Bay and the energy and commodities-driven cities like Houston and Perth

Sales of homes in Italy could fall by up to 12 per cent by the end of the year, experts have warned.

As prices fall for the fourth year in a row, research institute Nomisma predicts that transactions could drop to just 529,306 in 2012, the lowest in 12 years. The grim forecast follows stats that show sales already dropped by 20 per cent in the first three months of the year, while prices of new homes dropped by 1.8 per cent to become 11 per cent lower than 2008.

Bloomberg notes that lending for homeowners plunged by 47 per cent in the first quarter of 2012 as banks raised rates, while the economy could contract by up to 2.4 per cent this year.

“The deteriorating economic context, coupled with more selective borrowing conditions and the widespread expectations of a wider depreciation than already recorded are the main reasons for the new halt to the real estate market,” said Nomisma

Turkey’s property market began to heat up in May, when a new law was announced allowing 52 new countries to buy Turkish real estate. Five months later and a long-awaited cabinet decree has outlined final details on who will be able to freely purchase property – a move that has turned Turkey’s property up to boiling point.

Indeed, the Turkish government’s plans to allow a total of 129 nationalities to enter its emerging market will see 52 new countries given new rights to purchase real estate.

The latest cabinet decree comes shortly after the Turkish Central Bank revealed an immediate buying boom in the first month following the law’s enactment in May. In those four weeks alone, approximately 1.1 billion US dollars’ worth of real estate was snapped up by foreign investors – four times the total purchased by non-Turkish nationals in the whole of 2011.

Where is the money coming from? The Arabian Gulf.

Gulf investors are queuing up for a taste of Turkey, according to a recent report from Jones Lang LaSalle. The Turkish presence at the Gulf’s major real estate exhibition Cityscape is expected to soar in October, adds the Khaleej Times, as developers target their hunger new customers.

“We are seeing interest in Turkey from a range of investors including sovereign wealth funds, investment funds and private equity funds which have all strongly revived in 2012,” said Kivanc Erman, JLL’s director of capital markets and advisory for Turkey.

With Turkey’s economy set to grow by 4 per cent this year, according to a government report, following 3.2 per cent GDP growth in the first quarter of 2012, it is no surprise that the smell of warm Turkey is more appealing than the whiff of the Eurozone economic crisis.

Indeed, this surge in demand follows an already strong 2012, according to one agent, which saw enquiries increasing even in May, before the new law was defined.

Suleyman Akbay, Managing Director of Ocean Wide Properties, comments: “Turkey is making quite a name for itself on the property scene in lieu of Europe’s troubles and the ongoing investments it is making to advance its economy.

“Our clients are constantly amazed at the value for money properties available in prime business and coastal spots – competitive to many ‘distressed’ and heavily reduced property sales currently being seen in Spain, for example. But Turkey’s upper hand is that its values and rental yields are increasing year-on-year where other markets are contracting. Affordable, good connections, lots of new homes, a burgeoning population and now an increasing market presence – Turkey certainly has a beacon to shine.

An unusually hot summer seems to be cooling off Manhattan’s market for rental apartments. In July, the vacancy rate rose 0.19 percentage points from the previous month, to 1.2%, in an unusual uptick for the normally busy summer season, according to the latest monthly rental report released Thursday by brokerage Citi Habitats.

July marked the second consecutive month to see a rise in vacancies, a two-month run that brought them close to the levels of March, the report noted. In contrast, in July of last year, the vacancy rate stood at 0.86%.

“Normally you don’t see vacancy rates creep up during the summer,” said Gary Malin, president of Citi Habitats. “People are postponing their moves.”

Rising rents may have something to do with that. Average Manhattan rents set yet another record in July, hitting $3,459 a month, up 3% from the same time last year. The average monthly rent for a studio hit $2,078 in July, while average one- and two-bedroom apartments’ rented for $2,812 and $4,001, respectively.

Those kinds of prices are prompting some folks to wait before renting and others to buy rather than rent, Mr. Malin says. Nonetheless, he does not expect landlords to start slashing rents any time soon. In contrast, he notes that rents have been breaking records each month since March.

With the busy rental season coming to a close in August, landlords are taking more risks and “feel more power to keep rents where they are,” said Mr. Malin, adding that he is still hearing from his agents that they are still very busy.

Some others however disagree when it comes to the outlook.

“There is a spike in vacancy because people simply can’t afford it,” said Gus Waite, a local rental broker and cofounder of RentingNewYork.tv, a video website about renting apartments in the city. He predicts that rents will flatten out and come down in the fall.